Saturday, October 22, 2016

Black Belt frugality revisited.

Just over a year ago on Aug 31st 2015, I worked my last day at an away from home job.  My husband makes about $40.000 a year, give or take.  To walk away from my income and live on just what he makes was a huge step.  It required work from me.  There is a trade off one way or the other.  When I left my job, it wasn't to come home and watch soaps.  I don't have a hair dresser, get my nails done, or shop the latest trends.  My job was to offset my lost income, by saving money at home.  I say all of this to not brag about my money saving skills.  Those are still a work in progress.  I continue to learn each day (and a lot of that is through mistakes).  No, I write all of this to say IT CAN BE DONE!  IT DOES TAKE WORK!  It is possible to live on one income if you're willing to make the necessary sacrifices.  We chose to go to one income, but many people are forced into a single income.  Through a layoff or an illness.  Suddenly being dropped into this lifestyle can be intimidating.  I know there are many of you out there who either want to be a single income family or are facing being a single income family through no fault of your own.  In any case, I thought a re-do of my Black belt frugality series might be prudent.  Although the series dealt primarily with grocery shopping, I feel it's a good start.  The links are below.  Whether a voluntary or involuntary single income home , food is what they call a "Non-fixed expense" and that's where you make things work.  I won't address food in this post.  These links are all the info I have for that topic.  Instead I will focus on other expenses.  Let me say first I am not an expert, I'm just someone who is speaking from my own experience.

1) Other non-fixed expenses- can be utilities, gas, and clothing.  These are areas where the amount to be spent is based on your personal behavior or needs.  Adjust the behavior or needs, and your expenses change.

A) Utilities- Cable and phone is addressed below.  Other utilities are electricity/gas and water.  Everyone can grasp the standard ways of using  less of these items; turn off lights, water, etc when not needed.  I get that.  We're talking black belt though.  That means you are constantly looking for ways to use less.  Ways you haven't thought of before.

Vampire power-  Drives me nuts!  This is the unseen power loss.  Do you leave your phone,tablet, MP3 charger plugged into the wall without said electronic gadget attached?  What you don't realize is that charger is still drawing electricity....all day and sending it out into nothingness cause nothing is charging.  Your dollars are just floating away!  Charge your gadget then immediately unplug the charger from the wall.   Once your gadget is charged it no longer needs to be on the charger.  It will not plug the hole.  Unplug!  In fact unplug anything not currently being used.  They all draw power.  The coffee maker, lamps, tv's etc.  Yes it is inconvenient to have to re-plug something, but worth it.

Vampire water-  This is my own term.  This is the water that has to run down the drain for hot water to get to you.  It's harder for me to do this in my shower because lugging a 5 gallon bucket through my house to reuse the water is iffy.  I do it sometimes, but will admit I'm not consistent with it. But in my kitchen, I keep a pitcher nearby to catch the water til it runs hot.  I use this for the dogs water, coffee, whatever.  It's clean water and a clean pitcher so I can do what I want with it.  Water from my shower goes into the wash or is used to water my garden if need be.

The idea is to pay attention to the utility use around you and be constantly looking for ways to use it all wisely.  Ways to use less or make what is used do double duty.  When I use my canners, the water isn't dumped out.  The water bath canner water is used in my washer and the pressure canner is used to water plants.  The water from my washer is used to water my garden in a drought situation.  Make your utilities work harder for what you pay them.  I use my dryer in the winter to help heat the house!  Clothesline in the summer because the dryer does heat the house!

B) Gas-  Gas use goes down when one spouse is home, but there are still things you can do to make it even more so.  Combine trips so you're traveling less often.  Watch for the lowest gas prices and fill up then (as long as your budgeted gas money allows it).  If you can fill up in the morning when temps are cooler (less evaporation) and fill up slower(less air in the line).  Keep your car tuned up and your tires at the right pressure.

C) Clothing- Thrift store, yard sales, clearance sales, etc are awesome and a good line of defense.  Then comes some serious clothing shopping.  Learn a new skill!  Internet use does help when it comes to learning a new skill.  In this case sewing.  Now, in this day and age, fabric is almost as much as an outfit.  You have to be careful with how you sew.  I get the vast majority of my fabric from thrift stores.  Sometimes it's fabric by the yard, but may times it's king size sheets!  I look for colors I like in either cotton or flannel sheets.  King size sheets give me the most yardage for my money.  Can't sew an item from beginning to end? Then use these new skills to re-purpose something.  Make a thrift store shirt, jeans, or sweater small enough to fit you if they're too large by making a tuck or making a seam smaller.  Do you like an article of clothing all but....?  Well remove the offensive part.  You can add trim to a sweater that has a small stain near a button.  Revamp your thrift store purchases.  In many cases this can allow you to get the item cheaper.  Want to make something but patterns are too expensive?  You can sometimes find patters on sale during the holidays for .99 each, but in a pinch, you can take a shirt you like and use it (without cutting it) as a pattern.  Just lay it out seam to seam and cut out a matching piece from your fabric.  Add an extra 5/8th inch on either side, top and bottom of each piece to allow for you to sew it up.  A 5/8th inch seam allowance is used in all sewing patterns.  Don't have s sewing machine?  A needle and thread works well too.  Just be patient and take your time as you learn to sew by hand.

2) Semi non fixed expenses like car insurance, homeowners insurance, and even taxes (yes I said taxes), can be altered in some cases when your income changes or if you don't mind a little time on the phone.

A) Auto/Home Insurance- When it comes to car insurance and homeowners insurance, taking the time to make a phone call or two to find the best rate for you can greatly lower what you owe to cover your house or car.  I made a call one day and saved almost $700 for our car insurance, without changing my coverage!

 Re-evaluate your insurance needs.  A paid off clunker may be a good choice for liability insurance. If your cars value is close to the deductible on your insurance, it's worth putting it in liability only status.

You can also change your deductible for both (as long as you meet state requirements).  A higher deductible can mean a lower premium.

Discounts, use them!  Many insurance companies will give you a discount if the bill is paid in full for the 6 mths and/or for allowing them to bill you online.  If you can't do it this 6 mths; take your premium.  Divide it by 6 (mths) and set aside that amount each pay period in order to have the premium the next go around.  That's exactly what we do.  When insurance is due again, I move over the funds from savings to checking and it comes out of there.  It's the same as making a payment, only we pay less overall and, instead of paying interest to them, we earn interest from our savings.
When you're shopping around for auto or homeowners insurance, consider the discount you get when you combine both policies.

Gimmicks- Don't fall for the "Safe driving bonus checks", "accident forgiveness", or model year newer gimmicks.  You pay a higher premium for these and either get reimbursed the extra when you don't have a wreck or if you do have a wreck you have already paid for the extra year.

B) Taxes- Okay so all of you have probably not read a word I've written after first writing "taxes".  So here goes.  There are very few pluses when it comes to taxes, but there are some.  Changes in your income, change your taxes.  On the negative side, more income= more taxes.  On the positive side, less income can mean less taxes.  Not just a decrease in your overall tax bill, but a decrease in how much is withheld from the pay check you're receiving.  In order for this wonderful withholding to happen, You have to make a change in your withholding status.

 Fill out a new W2!  One spouse is now home, claim them as a dependent.  Claim all of your dependents.  Many will claim "single with no dependents" in order to have more taken out of each paycheck to get a Biiiiig tax refund In April(which they then blow).  This is a mistake even when you have two incomes.  By having a large withdrawal from your paycheck, you are allowing the US government to use YOUR money INTEREST FREE for the year, while you go without and probably end up making payments (with interest) because you can't afford something you need (or want).  It's better to arrange things where you owe a little to Uncle Sam or just not get a refund.  You would be amazed at how much more money you will have coming in each paycheck.  INCOME BOOST!  If you have to have money taken out of your check as a "forced savings account".  Just have the money automatically withdrawn to a savings account!  At least you can access that anytime of year when necessary and it earns interest for you!

3)Want or Need?  This is a choice each family makes; Cable/Satellite, Cellphone, a second car, and internet.  Your level of wiggle room in your single income budget will determine what choices you have.

A) Cable/ Satellite-  Evaluate what you can afford, and purchase the lowest package necessary.  Cable is a want.  Premium channels are a luxury.   In extreme situations, Cable can be cancelled entirely.  In a time of Hulu and Netflix, cable is becoming even more optional.   We have cable for football, but our cable is free with the internet we have to have.  It wouldn't save us anything to cancel just the cable, but in an emergency, the internet/cable is gone without a doubt.  It is a want.

B) Cellphone-  We've never had a cell phone with the exception of a pre-paid tracfone.  We've never needed a cell phone (although Diva would say otherwise). We use the tracfone very rarely.  We use Vonage, and our home phone is $12.75 a month.  Draw back to Vonage is that it is internet based.  No internet, no phone.  In all honesty, if we had to cancel our internet and vonage, the tracfone would still suit our needs.  I can live without a phone. (I know.  I heard the audible gasp from people).

C) Second Car- With one spouse now home, rethinking a second car may be an option.  If the car in question has a payment attached, then it also has full coverage insurance.  CHA CHING!  Sell the car!  You have just loosened your budget by taking that payment out.  In addition you can take that premium amount off your insurance.  Plus no tags!  If the car is paid for, better still.  You get all the joys of the car off your insurance, no tags, and a chunk of money added to your savings account for emergencies.  A second car is a want pure and simple.   If you want it, and your budget allows it, then great.  The choice is yours.  These are just ideas.

D) Internet-  Contrary to popular belief, internet, while fun and convenient, is not a "need".  The public library has computers and internet available for library members (and the membership is free ((for you anyway)).  Many businesses have wi fi.  Yes you have to travel somewhere, but if you combined a trip to the library with other errands then there's no additional travel expense.  Eh!  It gets you out of the house and can be an event for the kids.  I'm not saying it's ideal, but in a dire financial situation it beats being broke.

These are just a start.  Be aware of things you can change as you go about your day.  Re-think daily uses.  Yes, some of these things are easier to do when you have one spouse at home, but a lot of these can be done with both spouses working.  How awesome would it be to have more money working for you regardless of being a one or two income home.  Finally,  I will say this.  We were able to choose for me to stay home because we got out of debt.  Getting out of debt is the great frugal thing you can accomplish aside from avoiding debt in the first place.  I wish we knew then what we know now.  I could have been home a looooong time ago.

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